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Industry Investment: The power brokers

Industry Investment: The power brokers

Chair: Jessie Merwood, Simkins LLP (UK)

Guest speakers included:
Jarred Arfa, Artist Group International (US)
Nick Beveridge, The Ingenious Group (UK)
Eamonn Carey, Techstars (UK)
Zack Sabban, Festicket (UK)
 

The live music business is increasingly attractive to external investors, but who are the investors pouring money in and what is it that attracts them? 

Media and entertainment lawyer Jessie Merwood chaired the panel, posing the question: why invest in live?

Investment manager Nick Beveridge said that “investors like to diversify their portfolio,” stating that live music businesses make good investments as long as they have good discipline and can show they will deliver profits.

“There has definitely been a shift away from festivals,” added Beveridge, “as it’s become such a saturated market.” However, other aspects of the live music industry remain very attractive.

Zack Sabban offered his experience as chief executive of Festicket with “three types of investors”: specialist entertainment industry venture capitalists (VCs) and funds, more mainstream VCs, and the investment arms of large companies such as Channel 4 and Universal.

"There has definitely been a shift away from festivals"

“Investors invest as they like to make money,” stated Eamonn Carey, managing director of Techstars London. Carey explained that investors see the music business as more profitable, scalable and replicable nowadays, especially with the advent of the experience economy.

“People are spending more money on experiences and investors will follow where the money goes,” he said.

From the industry side of things, companies raise money to “fuel growth or to go international,” said Carey, stressing the need for an investor to understand a client’s motivations for raising capital.

The panel then discussed the power and dominance of companies such as Live Nation and AEG. “Consolidation for us is often a good thing,” said Jarred Arfa of Artist Group International, “when a business links up with a bigger company, it confirms to us that the money is good.”

He continued to say that there is still opportunity for people to be creative, as long as they “find the niches where the AEGs and Live Nations aren’t.”

Beveridge agreed, saying when major companies acquire festivals or events, it gives hope to promoters that their event could be next: “It shows the health of the industry,” he said.

As for the future, Sabban spoke of how data will allow promoters to understand audiences better and create more targeted events, attracting more investment. Carey talked about the opportunities around technology such as machine learning and virtual reality, and Beveridge stated that investors will start investing more in venues such as London’s Tobacco Dock and Printworks, which already have a well-established infrastructure and reputation.